SAP Buys SuccessFactors, Accelerates Cloud Strategy with Addition of Leading HCM Cloud App

Today, SAP announced plans to acquire SuccessFactors, a leading human capital management (HCM) cloud platform with more than 15 million subscribers. This greatly accelerates SAP’s move into the cloud and makes it a provider of one of the world’s leading cloud solutions. SAP plans to operate SuccessFactors as a separate company.

For SuccessFactors customers, this will create more integration opportunities between their best-of-breed cloud HCM solution with SAP’s suite of enterprise applications products, in-memory computing platform HANA, and mobile computing platform Sybase.

For SAP customers, this creates an immediate opportunity to buy an innovative, proven, fast-growing cloud solution from their strategic enterprise software partner. Today, there is only a small overlap between SAP customers and SuccessFactors customers — meaning most SAP customers do not currently use SuccessFactors (and vice versa).

While there are great opportunities and synergies with this acquisition, it also runs the risk of potential downsides for customers: pricing and contract terms are likely to change and the pace and direction of innovation could slow down as the provider moves from a nimble, niche supplier to a new parent company with many competing initiatives.